"This just makes it [Australia] a little bit more expensive and uncompetitive" ... CEO of Flight Centre, Graham Turner. Photo: Louise Kennerley
The boss of Australia’s largest travel agency, Flight Centre, has labelled the federal government’s decision to slug passengers with a 17 per cent increase in departure taxes as ‘‘illogical’’.
With the domestic tourism industry struggling due to record numbers of Australians travelling overseas and the high dollar making the country an expensive destination for foreigners, Graham Turner said the decision to increase the departure tax by $8 to $55 per passenger would be another blow.
‘‘Australia is already a very expensive place for people to come to, and this just makes it a little bit more expensive and uncompetitive,’’ he said.
As detailed in the budget, the government will raise the passenger movement charge from $47 to $55, sparking accusations from the travel sector that it was being used as a ‘‘cash cow’’.
The government will divert $61 million of the $610 million extra revenue raised over the next four years to an Asia marketing fund tasked with promoting Australia.
‘‘It is a bit illogical. This is robbing Peter to pay Paul. Australia needs to reduce its cost for inbound international tourists,’’ Mr Turner said. ‘‘This is doing the opposite. It is just one little step but it is certainly not going to encourage more inbound international tourism.’’
The departure tax will be indexed annually by movements in the consumer price index.
Qantas also said today that the extra charges would have a direct impact on the cost of flying, and would be felt the most by price-sensitive passengers on budget airlines such as Jetstar.
‘‘Australia is already a relatively high-cost destination for tourists due to the strong dollar and this tax will affect demand,’’ Qantas’s government relations chief, Olivia Wirth, said. ‘‘It will also have a disproportionate impact on the cost of shorter flights to places like New Zealand and South East Asia.’’
Passengers also face the prospect of airports recouping the cost of the government part-charging for Australian Federal Police officers working at terminals.
The charges for policing, which apply from July 1, will raise $118 million in revenue over four years from the country’s 10 biggest airports including Sydney, Melbourne, the Gold Coast and Brisbane.
Both Sydney and Melbourne airports said today that it was too early to comment on the impact of the charges detailed in the budget.
However, Melbourne Airport’s chief executive, Chris Woodruff, indicated that the airport will pass on the extra charges to airlines, conceding that the ‘‘bottom line is air travel is going to cost more’’.
Airports do not directly charge passengers for aeronautical fees.
After travel companies Jetset Travelworld and Wotif issued disappointing forecast statements in recent weeks, Flight Centre said most sections of the industry were ‘‘finding it very hard’’.
‘‘[Australia] is just not a popular destination at the moment and there is not a lot of sign it is going to change in the short term,’’ Mr Turner said.
The departure tax was last increased in 2008.